OGC Op. No. 06-01-23
The Office of General Counsel issued the following opinion on January 23, 2006, representing the position of the New York State Insurance Department.
Re: MGA Licensing and Registration
Question Presented
1. Must ABC obtain a separate license as an insurance agent, in order to act as a Managing General Agent ("MGA"), even though it is a wholly owned subsidiary of DEF a New York authorized insurer?
2. How does an MGA register with the Insurance Department?
Conclusion
1. Yes ABC needs to get a separate agents license as per N.Y. Ins. Law § 2102 (McKinney 2000 & 2006 Supp.)
2. An MGA is registered with the Insurance Department when the insurer for whom the MGA is acting files the form prescribed by the Superintendent, which is available on the Departments website.
Facts
ABC, a wholly owned subsidiary of DEF, a New York authorized insurer wants to act as an MGA in New York on behalf of XYZ, a non-affiliated insurer. ABC would now like to know if it needs an additional license to the one maintained by DEF. ABC also wants to know how it can register as an MGA with the Insurance Department.
Analysis
As the Department previously wrote to the inquirer on December 8th, while there is no requirement that an MGA be licensed in New York there is a requirement that it must be licensed as an insurance agent. N.Y. Ins. Law § 2102 (a)(1) (McKinney 2000 & 2006 Supp.) provides:
No person, firm, association or corporation shall act as an insurance producer or insurance adjuster in this state without having authority to do so by virtue of a license issued and in force pursuant to the provisions of this chapter.
N.Y. Ins. Law § 2101(k) (McKinney 2000 & 2006 Supp.) defines an Insurance Producer in relevant part:
In this article, "insurance producer" means an insurance agent, insurance broker, reinsurance intermediary, excess lines broker, or any other person required to be licensed under the laws of this state to sell, solicit or negotiate insurance
As ABC is a separate entity from DEF, it would need a separate license. Additionally, ABC needs an insurance agents license since it will be acting as an insurance agent, whereas DEF is licensed as an insurer.
Although there is no licensing requirement for an MGA, an MGA is required to be registered as such with the Insurance Department. N.Y. Comp. R. & Regs. tit. 11 Part 33.3 (2003) (Reg. 120) reads in relevant part:
(b)(1) An insurer that appoints an MGA to act for it in this State, either directly or through subagents of the MGA, shall complete and file the form required by subdivision (c) of this section with this department within 30 days of the appointment. An amended form shall be filed within 30 days after any change including termination of appointment.
(2) A domestic insurer that appoints an MGA to act for it in any state or foreign country, shall complete and file the form required by subdivision (c) of this section with this department, within 30 days of the appointment. An amended form shall be filed within 30 days after any change, including termination of appointment.
(c) A filing required by subdivision (b) of this section, relative to the appointment of an MGA, shall be in a form prescribed by the superintendent.
Thus the obligation is on the insurer who, on appointment of an MGA, must complete the required registration form. This form may be found on the Departments website at http://www.ins.state.ny.us/acrobat/reg120pz.pdf.
For further information one may contact Principal Attorney Paul A. Zuckerman at the New York City Office.